USD/JPY Strategy - Data Signals Rate Hike Possibility, BOJ May Take Action

Fundamental Analysis:

Investor expectations for another rate hike by the Bank of Japan (BOJ) have risen recently, driving the yen's strength. While geopolitical risks and Trump’s tariff threats have contributed to safe-haven demand, the main driver of the yen's rally is the stronger-than-expected data. Last week, Tokyo's November CPI data showed accelerating inflation, and BOJ Governor Kazuo Ueda stated over the weekend that if inflation is confirmed to rise to 2%, the central bank will adjust its monetary easing policy at the appropriate time. With the Federal Reserve still showing more than a 50% probability of a rate cut in December, the increased likelihood of a BOJ rate hike is undoubtedly bolstering yen bulls.

Technical Analysis:

On the 15-minute USD/JPY chart, the price is in a descending range. If the price retraces to a supply and demand zone, a short position can be initiated from the uncompleted supply zone. A stop loss should be set above the range's top, with a risk-to-reward ratio of 1:1 or extending the target to the current low.

Entry: Short at 150.139 or better.

Stop Loss: Above 150.745.

Target: 149.534. Support Level: 149.079.

Resistance Level: 150.745.